Deductions & credits

Not exactly sure myself...just a couple BUT's as comments as my impression of what might happen (admittedly a knee-jerk reaction/evaluation).    Yeah, VA residents are forced to use the same deduction procedure in both Fed & VA....and then it gets complicated.

 

1)  QCDs are only allowed if you were over age 70.5 at the time the distribution was made.  So being over age 65 is not sufficient.  And the age 70.5 applies to each person and their own IRA distribution.   IF you, or spouse, or both of you were under age 70.5, then it is not a QCD and has to be entered into Schedule A in the Federal section anyhow....and will potentially transfer as itemized deductions to VA anyhow.  Granted, this depends on whether enough gets added to Federal "itemized" such that Fed Itemized Deductions can be used in the first place.

 

2)  If the distributions "were" eligible to be QCDs in the Federal section, I think you are mistaken as to what advantage you "think" you might be gaining for you are attempting to do.  Any QCD removes that income entirely from the Federal tax return's AGI.   And, since Federal AGI is the starting place for the VA tax return, the QCD is being fully removed from your VA income already.  You will then get the full VA Std Deduction on top of that.  The effect on the Federal final "taxable" income....might or might not be similar eitehr way, but the Fed Std Ded is HUGE.....MFJ - $27,400 for both age 65 or older.   Fed tax rates are more important than VA state tax rates....and you want Maximum reductions in Federal "taxable" income to be your primary target.

 

3)  IF they were actual QCDs...... A possible unrecognized consequence if you are allowed to change the QCDs to itemized deductions instead (which I am not sure of anyhow).   IF they were changed to itemized deductions, then the full amount of the IRA distributions are added to your Federal AGI, and if your MFJ AGI goes over a certain level, your Medicare part B/D premiums could be increased for 2022.  ( the first jump will likely occur around 176,000-to-180,000 for MFJ AGI...but the exact number may not be published yet).  If you have all  your income entered so far, you can look at your AGI so far, and see if you are anywhere remotely close to that.

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Others may have points to make here to show me where I'm not thinking right, or may be somewhat, or totally off-base.   Details of your exact sources/levels of income and potential deductions can become critical...so it's really hard to say whether it would really work to your advantage or not.

____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*